- Punch Bowl Social filed for Chapter 11 protections and declared bankruptcy on Monday, according to court documents. Punch Bowl Social did not reply to Restaurant Dive's request for comment by press time.
- As of Dec. 8, the company was only operating three out of its 14 units with limited capacity. The open venues were losing money on a daily basis and the company has since closed them. The company’s estimated liabilities are between $10 million and $50 million, and it also received about $10 million in Paycheck Protection Program loans, according to a court filing.
- Pre-pandemic, eatertainment chains were expected to outpace casual dining chains, which were struggling with attracting younger demographics. Technomic research from spring of 2019 found that 70% of consumers prefer eatertainment venues to casual dining restaurants for group outings. Punch Bowl Social was seen as an emerging chain, but its growth was stopped short when the pandemic struck in March.
Punch Bowl Social started 2020 with a $140 million investment from Cracker Barrel and plans to open 11 units by the end of the year. The company even aimed to open a hotel in 2022. Those goals were squashed when the pandemic hit, leading to dining room closures and Cracker Barrel pulling its investment. Punch Bowl Social faced foreclosure in March when it had to close all of its locations and lay off substantially all its staff. But then-CEO Robert Thompson had said that it was working with its lender, CrowdOut, to create a strong position for reopening.
The company had to close two locations after it was unable to reach an agreement on new lease terms with a landlord in June. The eatertainment chain planned to reopen its locations on a rolling basis initially since its venues could still have 600 people inside while exercising social distancing.
But with ongoing dining restrictions and diners reticent to go out, Punch Bowl has continued to struggle to open its locations. As of August, the company had 16 restaurants, but according to its website it currently has 14.
Punch Bowl Social CEO Robert Thompson also exited the company, which he launched in 2012, in August to develop new concepts. John Haywood, who served as CEO of Garden Fresh Restaurants, took over as CEO and put the company’s hospitality aspirations on hold, but remained confident in the company’s ability to reopen locations.
"Punch Bowl Social [was] extremely successful pre-COVID, so there's nothing broken with the brand," Haywood previously told Restaurant Dive. "We had industry-leading average-unit sales pre-COVID, so we face the same challenges that the entire industry does."
The future of the eatertainment industry is on shaky ground as others in the space also struggle. Dave & Busters, for example, saw significant comparable store declines, especially compared to casual dining chains. During Q3 2020, the company reported comparable sales declines of 66%, according to an earnings release. Of its 114 stores, roughly 74 were open during the quarter, but these stores were averaging a sales index declines of 57%. Earlier this year, it also announced layoffs of over 1,300 employees across seven states. With a resurgence of COVID-19 cases and renewed indoor dining restrictions, the chain reported a comp sales decline of 71% during the first five weeks of Q4 2020.